The rupee weakened against the US dollar in today’s trading session, primarily driven by sustained capital outflows from Indian equity markets. Foreign investors have been net sellers in recent sessions, putting downward pressure on the local currency.
In addition to capital outflows, increased dollar demand from importers, particularly oil importers, further exacerbated the rupee’s decline. The rise in crude oil prices has increased the demand for dollars to finance these imports.
Global economic uncertainties, including concerns about rising inflation and potential interest rate hikes by major central banks, have also contributed to the weakening of the rupee. These factors have dampened investor sentiment and led to a risk-off approach, favoring the US dollar as a safe-haven asset.
Analysts are closely monitoring the situation and expect the rupee to remain volatile in the near term, influenced by global macroeconomic developments and capital flow dynamics.
